H.B. 96 Enrolled

WRONGFUL LIEN AMENDMENTS
1997 GENERAL SESSION
STATE OF UTAH
Sponsor: John E. Swallow
AN ACT RELATING TO LIENS; PROVIDING DEFINITIONS; PROHIBITING RECORDING
OR FILING A WRONGFUL LIEN OR OTHER WRONGFUL NOTICE DOCUMENT
ON THE PROPERTY OF ANOTHER WHICH ADVERSELY AFFECTS THE
PROPERTY TITLE; PERMITTING THE COUNTY RECORDER TO REJECT A LIEN;
PROVIDING EXCEPTIONS; CLARIFYING THE STATUTORY IMPACT ON CIVIL
PROCEDURE RULES; AND PROVIDING CRIMINAL AND CIVIL PENALTIES.
This act affects sections of Utah Code Annotated 1953 as follows:
AMENDS:
38-1-25, Utah Code Annotated 1953
ENACTS:
38-9-5, Utah Code Annotated 1953
38-9-6, Utah Code Annotated 1953
38-9-7, Utah Code Annotated 1953
REPEALS AND REENACTS:
38-9-1, as enacted by Chapter 182, Laws of Utah 1985
38-9-2, as enacted by Chapter 182, Laws of Utah 1985
38-9-3, as enacted by Chapter 182, Laws of Utah 1985
38-9-4, as enacted by Chapter 182, Laws of Utah 1985
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 38-1-25 is amended to read:
38-1-25. Abuse of lien right -- Penalty.
Any person entitled to record or file a lien under Section 38-1-3 is guilty of a class B
misdemeanor who [knowingly] intentionally causes [to be filed for record] a claim of lien against
any property, which contains a greater demand than the sum due [him,] to be recorded or filed:
(1) with the intent to cloud the title[, or];

(2) to exact from the owner or person liable by means of [such] the excessive claim of lien
more than is due [him,]; or
(3) to procure any unjustified advantage or benefit [whatever, is guilty of a misdemeanor].
Section 2. Section 38-9-1 is repealed and reenacted to read:
38-9-1. Definitions.
As used in this chapter:
(1) "Interest holder" means a person who holds or possesses a present, lawful property
interest in certain real property, including an owner, title holder, mortgagee, trustee, or beneficial
owner.
(2) "Lien claimant" means a person claiming an interest in real property who offers a
document for recording or filing with any county recorder in the state asserting a lien or other claim
of interest in certain real property.
(3) "Owner" means a person who has a vested ownership interest in certain real property.
(4) "Record interest holder" means a person who holds or possesses a present, lawful
property interest in certain real property, including an owner, titleholder, mortgagee, trustee, or
beneficial owner, and whose name and interest in that real property appears in the county recorder's
records for the county in which the property is located.
(5) "Record owner" means an owner whose name and ownership interest in certain real
property is recorded or filed in the county recorder's records for the county in which the property is
located.
(6) "Wrongful lien" means any document that purports to create a lien or encumbrance on
an owner's interest in certain real property and at the time it is recorded or filed is not:
(a) expressly authorized by this chapter or another state or federal statute;
(b) authorized by or contained in an order or judgment of a court of competent jurisdiction
in the state; or
(c) signed by or authorized pursuant to a document signed by the owner of the real property.
Section 3. Section 38-9-2 is repealed and reenacted to read:
38-9-2. Scope.

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(1) The provisions of this chapter apply to any recording or filing or any rejected recording
or filing of a lien pursuant to this chapter on or after May 5, 1997.
(2) The provisions of this chapter shall not prevent a person from filing a lis pendens in
accordance with Section 78-40-2 or seeking any other relief permitted by law.
(3) This chapter does not apply to a person entitled to a lien under Section 38-1-3 who files
a lien pursuant to Title 38, Chapter 1.
Section 4. Section 38-9-3 is repealed and reenacted to read:
38-9-3. County recorder may reject wrongful lien within scope of employment -- Good
faith requirement.
(1) A county recorder may reject recording of a lien if the county recorder determines the
lien is a wrongful lien as defined in Section 38-9-1. If the county recorder rejects the document, the
county recorder shall immediately return the original document together with a notice that the
document was rejected pursuant to this section to the person attempting to record or file the
document or to the address provided on the document.
(2) A county recorder who, within the scope of the county recorder's employment, rejects
or accepts a document for recording or filing in good faith under this section may not be liable for
damages except as otherwise provided by law.
(3) If a rejected document is later found to be recordable pursuant to a court order, it shall
have no retroactive recording priority.
(4) Nothing in this chapter shall preclude any person from pursuing any remedy pursuant
to Utah Rules of Civil Procedure, Rule 65A, Injunctions.
Section 5. Section 38-9-4 is repealed and reenacted to read:
38-9-4. Civil liability for filing wrongful lien -- Damages.
(1) A lien claimant who records or files or causes a wrongful lien as defined in Section
38-9-1 to be recorded or filed in the office of the county recorder against real property is liable to
a record interest holder for any actual damages proximately caused by the wrongful lien.
(2) If the person in violation of this Subsection (1) refuses to release or correct the wrongful
lien within 20 days from the date of written request from a record interest holder of the real property

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delivered personally or mailed to the last-known address of the lien claimant, the person is liable to
that record interest holder for $1,000 or for treble actual damages, whichever is greater, and for
reasonable attorney fees and costs.
(3) A person is liable to the record owner of real property for $3,000 or for treble actual
damages, whichever is greater, and for reasonable attorney fees and costs, who records or files or
causes to be recorded or filed a wrongful lien as defined in Section 38-9-1 in the office of the county
recorder against the real property, knowing or having reason to know that the document:
(a) is a wrongful lien;
(b) is groundless; or
(c) contains a material misstatement or false claim.
Section 6. Section 38-9-5 is enacted to read:
38-9-5. Criminal liability for filing a wrongful lien -- Penalties.
(1) A person who intentionally records or files or causes to be recorded or filed a wrongful
lien with a county recorder is guilty of a class B misdemeanor. Under this Subsection (1), it is an
affirmative defense to this offense that the person recorded or filed a release of the claim or lien
within 20 days from the date of written request from a record interest holder that the wrongful lien
be released. The accused person shall prove this affirmative defense by a preponderance of the
evidence.
(2) A person who intentionally records or files or causes to be recorded or filed a wrongful
lien with the county recorder is guilty of a third degree felony if, at the time of recording or filing,
the person knowingly had no present, lawful property interest in the real property and no reasonable
basis to believe he had a present, lawful property interest in the real property.
(3) Nothing in this section shall bar a prosecution for any act in violation of Section
76-8-414.
Section 7. Section 38-9-6 is enacted to read:
38-9-6. Petition to file lien -- Notice to record interest holders -- Summary relief --
Contested petition.
(1) A lien claimant whose document is rejected pursuant to Section 38-9-3 may petition the

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district court in the county in which the document was rejected for an expedited determination that
the lien may be recorded or filed.
(2) (a) The petition shall be filed with the district court within ten days of the date notice is
received of the rejection and shall state with specificity the grounds why the document should
lawfully be recorded or filed.
(b) The petition shall be supported by a sworn affidavit of the lien claimant.
(c) If the court finds the petition is insufficient, it may dismiss the petition without a hearing.
(d) If the court grants a hearing, the petitioner shall serve a copy of the petition, notice of
hearing, and a copy of the court's order granting an expedited hearing on all record interest holders
of the property sufficiently in advance of the hearing to enable any record interest holder to attend
the hearing and service shall be accomplished by certified or registered mail.
(e) Any record interest holder of the property has the right to attend and contest the petition.
(3) Following a hearing on the matter, if the court finds that the document may lawfully be
recorded, it shall issue an order directing the county recorder to accept the document for recording.
If the petition is contested, the court may award costs and reasonable attorney's fees to the prevailing
party.
(4) A summary proceeding under this section is only to determine whether or not a contested
document, on its face, shall be recorded by the county recorder. The proceeding may not determine
the truth of the content of the document nor the property or legal rights of the parties beyond the
necessary determination of whether or not the document shall be recorded. The court's grant or
denial of the petition under this section may not restrict any other legal remedies of any party,
including any right to injunctive relief pursuant to Rules of Civil Procedure, Rule 65A, Injunctions.
(5) If the petition contains a claim for damages, the damage proceedings may not be
expedited under this section.
Section 8. Section 38-9-7 is enacted to read:
38-9-7. Petition to nullify lien -- Notice to lien claimant -- Summary relief -- Finding of
wrongful lien -- Wrongful lien is void.
(1) Any record interest holder of real property against which a wrongful lien as defined in

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Section 38-9-1 has been recorded may petition the district court in the county in which the document
was recorded for summary relief to nullify the lien.
(2) The petition shall state with specificity the claim that the lien is a wrongful lien and shall
be supported by a sworn affidavit of the record interest holder.
(3) (a) If the court finds the petition insufficient, it may dismiss the petition without a
hearing.
(b) If the court finds the petition is sufficient, the court shall schedule a hearing within ten
days to determine whether the document is a wrongful lien.
(c) The record interest holder shall serve a copy of the petition on the lien claimant and a
notice of the hearing pursuant to Rules of Civil Procedure, Rule 4, Process.
(d) The lien claimant is entitled to attend and contest the petition.
(4) A summary proceeding under this section is only to determine whether or not a document
is a wrongful lien. The proceeding shall not determine any other property or legal rights of the
parties nor restrict other legal remedies of any party.
(5) (a) Following a hearing on the matter, if the court determines that the document is a
wrongful lien, the court shall issue an order declaring the wrongful lien void ab initio, releasing the
property from the lien, and awarding costs and reasonable attorney's fees to the petitioner.
(b) (i) The record interest holder may record a certified copy of the order with the county
recorder.
(ii) The order shall contain a legal description of the real property.
(c) If the court determines that the claim of lien is valid, the court shall dismiss the petition
and may award costs and reasonable attorney's fees to the lien claimant. The dismissal order shall
contain a legal description of the real property. The prevailing lien claimant may record a certified
copy of the dismissal order.
(6) If the district court determines that the lien is a wrongful lien as defined in Section
38-9-1, the wrongful lien is void ab initio and provides no notice of claim or interest.
(7) If the petition contains a claim for damages, the damage proceedings may not be
expedited under this section.

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